A new report out today (Nov. 9) by analytics firm IHS anticipates that solar photovoltaic (PV) sales will grow strongly through the first half of 2016 growing to 65.5 gigawatts of new solar power world wide. But the incentives that have helped fuel its growth will subside in 2017, which could slow solar growth down in the second half of 2016.

Though the 65.5 gigawatts of PV slated for sales in 2016 is a 12 percent increase over 2015 when 58.7 gigawatts of PV are slated to be sold it still shows a significant slowing in growth in the industry. IHS said solar installations in 2015 increased by 55 percent over 2014.

What's driving the explosion and decline are the ends of solar incentive programs, according to the company. "Strong solar photovoltaic (PV) production and shipments are forecast during the first half of 2016, due to installation deadlines, sunsetting solar tax credits and other policy dynamics of the two largest global solar markets, China and the United States," the company said.

The report anticipated that prices in the U.S. will remain stagnant in the first half of 2016 driven by demand as suppliers try to meet demand and because of the anti-dumping tariffs in the U.S. "Most tier-one module and wafer suppliers will experience limited product availability until the second quarter (Q2) of 2016, partly due to high demand from installations in China and the United States."

Though China announced an additional quota in October, for the projects to qualify for the country's 2015 incentives they must be installed by June 2016. IHS also stated that the majority of large U.S. projects should be completed in the first half of the year.

"Global PV demand for 2017 will slow, which will adversely affect module ASPs and margins in the second half of 2016," Zoco said.

"There will be some buildup of inventory, and module price declines will be much heavier than they were in 2015 and during the first half of 2016. A slump in global PV demand in 2017 looks increasingly likely, as the United States is expected to suffer a major decline in 2017, following planned significant reductions in the country's investment tax credit," Zoco said.

Overall, the changing market conditions are expected to lead to a 7.8 gigawatt of sales declines in 2017. The analytics firm said that outside the U.S. and China the global market is expected to grow by 11 percent—but the declines in the major markets will likely cause overall installations to fall in 2017.

The loss could be offset somewhat. "It's important to note that new policy regulations and incentives in other global markets could mitigate some of the forecasted slowing growth in 2017," Zoco said. Also, though just a slight chance it's also possible the U.S. could extend or change its solar tax credits.

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